Receive $80 Grab vouchers valid for use on all Grab services except GrabHitch and GrabShuttle when you subscribe to BT All-Digital at only $0.99*/month.
Find out more at btsub.sg/promo
[MUMBAI] Top Indian firms, including Reliance Industries and Bharti Airtel, have applied for licences to set up low-cost banks that could bring millions more people into the formal banking sector, finance officials said.
A total of 41 applicants submitted applications for "payments bank" licences, while 72 applied for "small finance bank" licences, according to the Reserve Bank of India (RBI), which is administering the scheme.
The RBI, India's central bank, said on its website that it would set up a committee of experts that would include a former RBI deputy governor to evaluate the applications for the "niche" banks.
The scheme, which was first announced by the previous Congress government, is designed to offer low-cost banking for people who either live in isolated rural areas or else have balked at paying hefty charges for a range of services that they never use.
The most eye-catching application came for a payment bank licence by Reliance Industries, owned by the country's richest businessman Mukesh Ambani, as part of a joint venture with the State Bank of India.
Reliance's competitor in the telecom sector - Bharti Airtel - features in the same list under Airtel M Commerce Services, which is a tie-up with Kotak Mahindra Bank.
Automobile major Mahindra & Mahindra's information technology arm, Tech Mahindra, is also among the applicants for the payments bank licences.
Payment banks - basic facilities which are expected to mainly operate in rural ares - will be able to accept deposits and remit money but will not administer loans, the RBI has previously announced. The small finance banks can offer a slightly larger wider range of services.
Access to formal banking is still limited in large parts of India as a lack of basic infrastructure dissuading most banks from opening branches in rural areas, forcing many people to turn to illegal money lenders.
In 2011 the World Bank estimated that over 60 percent of Indian adults did not have bank accounts.